Non-disclosure of resale of insured car leads to claim denial

Dehradun: In a case concerning failure to notify the insurance company about a resold insured vehicle, the state consumer commission, while overturning the Chamoli district consumer commission’s judgment directing compensation to the vehicle owner, upheld the complaint of Oriental Insurance Company Ltd (OICL) challenging the order.
The commission found merit in OICL’s assertion that Rajinder Singh, the Chamoli-based car owner, had violated regulations by not registering the vehicle in his name within the stipulated 14-day period after purchasing from original owner, Rajesh Mehta.
Singh had bought the car in May 2013 and transferred it to his name in the RTO. The car was washed away in Alaknanda river on June 16, 2014. Subsequently, Singh submitted a claim to OICL. After the claim was denied on the grounds that the buyer’s name was not updated in the policy, Mehta filed an application requesting compensation. The matter reached the district consumer commission, where in July 2016, the case was decided in favour of Singh. Aggrieved by the judgment and district commission’s order, OICL contested it in the state commission. It noted that Singh failed to prove he had intimated OICL about purchase of vehicle within the prescribed period as per the policy.
“It is also established he never completed requisite formalities to change his name in the policy. It is proven on record that there was no privity of contract between him and OICL, which demonstrated that he was not a consumer of the latter. Hence, he has no insurable interest in the vehicle,” the commission said.
Last week, the state commission observed that the Chamoli district commission had erroneously and wrongly passed the impugned judgment and order.
“The judgment is liable to be set aside, and the appeal deserves to be allowed,” the state commission said. It ordered the release of statutory amount deposited by OICL in its favour.